TREASURY

ECOFIN (9 October 2007)

Alistair Darling: The Economic and Financial Affairs Council was held on 9 October in Luxembourg. The Financial Secretary to the Treasury attended for the UK. The items on the agenda were as follows:
	Implementation of the Stability and Growth Pact
	Ministers adopted a Commission recommendation to abrogate the Excessive Deficit Procedure of the United Kingdom under Article 104(12) of the Treaty, and a recommendation for the Czech Republic to take further action in order to end their Excessive Deficit, in accordance with Article 104(7) of the Treaty.
	The UK supports a prudent interpretation of the Stability and Growth Pact (SGP) which takes into account the level of debt, the influence of the cycle and the level of public investment. The UK Government welcome the abrogation of the UK EDP.
	Public Finances in the EMU
	Following their discussion at ECOFIN in July, Ministers agreed Conclusions on the Commission's annual Public Finances Report and accompanying proposals aimed at improving the effectiveness of the preventive arm of the Stability and Growth Pact by effectively applying the revised Stability and Growth Pact.
	Quality of Public Finances
	Ministers adopted Conclusions on the role that the modernisation of public administration can play in enhancing competitiveness, delivering better services, achieving better value for money and ensuring the control of government expenditure. This follows the discussion at the September Informal ECOFIN in Lisbon, at which the UK welcomed the sharing of experience between Member States.
	Developments on the economic and financial situation
	Ministers discussed the current economic situation and disturbances in global financial markets, and the possible policy responses to the issues raised. The UK is committed to pursuing an effective, considered global response to these global financial market issues, and believes the Financial Stability Forum provides the best route to pursue these aims.
	Better Regulation
	Ministers agreed Conclusions on better regulation and its role in improving EU competitiveness. The UK welcomes the calls for further progress to be made both at Member State and EU level towards reducing administrative burdens in the EU.
	Flexicurity
	Ministers agreed Conclusions on the economic aspects of flexicurity, which welcomed the Commission's work on developing an approach towards shared principles to develop labour market flexibility alongside support by social systems. The UK believes that fiscal sustainability is critical in the face of Europe's changing demographics.
	Dialogues with third countries
	The Commission presented Ministers with an update on its ongoing dialogues with third countries, including the USA, Japan, China, India and Russia, and focused on the economic, financial and regulatory aspects of the discussions.
	Financial Service— Clearing and Settlement
	Ministers agreed Conclusions on Clearing and Settlement, which covered the ECB's proposed Target 2 Securities project, the implementation and functioning of the Code of Conduct, progress on removal of the Giovannini barriers and the ESCB/CESR standards. These initiatives are intended to address deficiencies in the European Clearing and Settlement landscape—an area where the Council has long been pressing for change. The UK welcomes progress in improving the European Clearing and Settlement landscape.
	Financial Services - EU arrangements for Financial Stability
	Ministers agreed Conclusions on the long-running discussion of how to take forward EU arrangements for financial stability. The UK strongly supports efforts to improve financial stability arrangements, including financial crisis management arrangements in Europe, by ensuring all Member States have robust national crisis management arrangements, and welcomes improvements to cross-border communication and co-operation in financial crises.

ECOFIN

Alistair Darling: The Economic and Financial Affairs Council will be held on 13 November in Brussels. The items on the agenda are as follows:
	Lisbon strategy: The new three-year cycle
	The next governance cycle for the Lisbon strategy will run for three years from 2008-2011. The Council will discuss draft conclusions on the next three-year cycle for the Lisbon strategy, prepared by the Economic Policy Committee. It will also take into account a recent European Commission communication prepared at the request of the 2007 Spring European Council.
	Globalisation: Capital and labour flows
	The Council will exchange views on the basis of a report on the economic impact of migration prepared by the European Commission, taking into account a paper prepared by the Economic Policy Committee.
	Statistics
	The Council will be invited to agree conclusions on EU statistical matters, including the 2007 EFC status report on information requirements, the reduction of the statistical burden, EU statistical governance, and the communication of major statistical revisions, as prepared by the Economic and Financial Committee. The UK welcomes work to reduce the statistical burden on member states.
	Taxation
	a) VAT package
	The Council will discuss a set of measures that will modernise the EU VAT rules for the cross-border supply of services, with particular focus on proposed changes to the rules for the telecoms, broadcasting and e-services sectors. The UK supports the modernisation of the EU VAT regime.
	b) Green taxation: Passenger car related taxes.
	Ministers will discuss Commission proposals for a new directive on linking car taxation to CO2 emissions.
	c) Reduced VAT rates
	Ministers will discuss Commission proposals to extend until 2010 most of the new Member States' derogations for reduced VAT rates.
	The UK Government are supportive of the proposal to extend most of the temporary derogations granted to those Member States that acceded to the European Union after 1 January 1995.
	Global Navigation Satellite System (GALILEO): Financing aspects
	Following the discussion at the July ECOFIN, there will be a further exchange of views on the financing of the Galileo project. The UK will continue to express concern with the Commission's financing proposal and argue that the option of reprioritising funds from existing programmes must be considered.
	Presentation of the Annual Report by the Court of Auditors Concerning the Financial Year 2006.
	The Council will receive a presentation from the European Court of Auditors on the 2006 general budget. This will be the first presentation that Ministers will hear on the 2006 budget, and will mark the start of the annual discharge process.

Double Taxation Convention (United Kingdom and Moldova)

Jane Kennedy: A new Double Taxation Convention with Moldova was signed on 8 November 2007. After signature, the text of the Convention was deposited in the Libraries of both Houses and made available on HM Revenue and Customs' website. The text of the Convention will be scheduled to a draft Order in Council and laid before the House of Commons in due course.

CHILDREN, SCHOOLS AND FAMILIES

School Funding Settlement for 2008-09 to 2010-11

Jim Knight: I am announcing today the first three year school funding settlement, for 2008-09 to 2010-11. This settlement and the capital settlement announced on 10 October will mean that, by 2011, total funding per pupil will have increased nationally to £6,600. Education spending is projected to rise as a proportion of GDP from 4.7 per cent. in 1996-67 to 5.6 per cent. by 2010-11. And for the first time, schools will have three year budgets, enabling them to plan further ahead, to take better long-term decisions, to use their budgets more efficiently and strategically over a three-year period.
	On 25 June this year I announced to the House a package of measures for school funding for 2008-09 to 2010-11. The key features were: a continuation of the spend-plus methodology for DSG distribution, coupled with a fundamental formula review, to start in the new year; a minimum funding guarantee (MFG) dependent on average cost pressures, but with efficiency taken into account; further measures to broaden the membership of schools forums, particularly from early years and 14-19 stakeholders; a staged approach to the reform of early years funding; and additional funding for diplomas to be provided through a specific formula grant, with local discretion on how this funding is used to pay for provision.
	This statement sets out the Government's decisions for the next three years on: the overall increase in schools funding, the dedicated schools grant (DSG) and other grants; details of funding for our key priorities; and the level of the MFG for schools. Details of allocations of both the DSG and specific grants to authorities and schools are being sent to local authorities today and I am placing copies in the Library of the House.
	The overall level of schools funding will increase by 4.3 per cent. in 2008-09, 4.7 per cent. in 2009-10 and 5.3 per cent. in 2010-11. This includes funding for our key priorities: the personalisation of teaching and learning, support for all pupils to make good progress, the extension of the early years offer to parents, and extended children's services provided from schools. It also takes account of the additional costs of the expansion of the academies programme—our plans allow for a further 50 academies to be opened in each of the next three years, bringing the total to 230 academies open by September 2010.
	The strong focus on personalising teaching and learning to the needs of every child will continue over the next three years, with additional sums of £330 million, 535 million and 912 million earmarked within DSG. This additional funding is to support universal roll-out of a personalised offer to all pupils—including those with special educational needs—and will be distributed on the basis of numbers of 5 to 15 year olds. In taking decisions on allocations, local authorities and their schools forums should consider our priorities: ensuring all children are making good progress; early intervention to prevent children from falling behind, especially those with special educational needs; targeted support for specific groups including those ethnic minorities at particular risk of poor outcomes, white working class children, children in care; and ensuring that the school workforce has the skills and confidence to address the needs of children from these groups.
	To complement this increased funding through DSG, we will roll-out funding to help improve the rate at which children progress, ensuring all children can meet their potential, and those who are behind expectations, or are falling behind, get back on track. A current pilot of this approach will run until July 2009. We will then make available £138 million in 2009-10, and £315 million in 2010-11 to improve progression in schools. By 2010-11, this funding will enable an additional 300,000 under-attaining pupils a year to benefit from 1:1 tuition in English, and a further 300,000 pupils in Maths. Taken together, we will be spending an additional £1.2 billion on personalisation and progression by 2010-11. There will be support for children who have fallen behind in basic literacy and numeracy through the national roll-out of "Every Child a Reader and Every Child Counts", with £79 million being made available in 2010-11 via the Standards Fund. Further funding will be announced shortly for the "Every Child a Writer" programme.
	The increased funding for progression will be delivered through the Standards Fund for the next three years, as will increases in funding to extend the entitlement to free nursery education from 12 ½ to 15 hours, announced by the Minister for Children, Young People and Families, on 7 November, and for extended schools. Our aim is that from 2011-12 these funding allocations will be mainstreamed into the DSG. We will consider how this can best be achieved as we take forward work on implementing the funding system for 2011-12 and onwards, following the fundamental formula review which starts in January 2008.
	Narrowing the attainment gap for pupils from disadvantaged backgrounds is one of the strategic objectives of my Department and is a key priority for the Government. The most significant attainment gap is between deprived and more affluent pupils—including those in generally affluent authorities. We are therefore allocating £40 million in each of the next three years to support children from deprived backgrounds who attend schools in less deprived local authorities whose overall level of deprivation is in the bottom third, as defined by our new indicator of income deprivation, based on tax credit data. Our strong expectation is that this additional funding will be directed to those schools with the most disadvantaged pupil intakes. Alongside this additional money for deprived children in less deprived authorities, we will continue to press all authorities to properly reflect in their local funding formulae the existing funding for deprivation delivered through DSG.
	For authorities whose spending was below the formula in 2005-06, we have closed half of that gap over the past two years: we will complete this process over the next three years, with additional sums of £20 million, 40 million and 60 million.
	Two further developments of the funding system take account of changing patterns of demography. First, all authorities will receive a minimum cash increase of at least 2 per cent. irrespective of their pupil numbers: that will particularly help those authorities where pupil numbers are rapidly declining. Secondly, for authorities experiencing rapid growth in pupil numbers, or a significant influx of children with English as an additional language, there will be an exceptional circumstances grant, paid out every autumn.
	As well as the additional funding for ministerial priorities, we are continuing to provide all local authorities with increases for schools' core funding. I announced in June that the MFG would continue to deliver a minimum per pupil increase for all schools in each of the next three years, which would reflect average cost pressures. Our assessment of cost pressures includes an assumed efficiency gain of 1 per cent. for each of the next three years, reflecting the substantial improvement in efficiency which we expect to be achieved across the schools sector and the public sector as a whole. It is based on a cautious but realistic assessment of the wide range of pay and non-pay pressures that schools will face across the next three years.
	The result is an MFG for all schools set at 2.1 per cent. for each of the next three years, which is affordable within the comprehensive spending review settlement, while allowing us to allocate significant additional funding increases to our key priorities. The settlement provides for the first time three years of funding allocations, and will help schools to plan how they will meet the range of cost pressures they face from pay and non-pay over this period as a whole.
	The Department is working with our external partners, including representatives of headteachers and governors to develop support mechanisms for schools to help them make the best use of their resources to improve outcomes for pupils. The aim will be to provide schools with access to a range of support that is tailored to their individual circumstances, exemplifies good practice and provides opportunities for peer review and support. We will announce further details later in the year.
	We have received the detailed recommendations of the STRB on teachers' pay from September 2008 and I am grateful to them for their work. We will be announcing our response to the STRB's report when we have carefully considered their detailed recommendations within the wider context of the Government's approach to public sector pay. We will ensure that the Government response to the STRB's recommendations is consistent with the MFG we are announcing today.
	As we announced in June, all authorities will receive a basic increase in their DSG per pupil made up of: the MFG at 2.1/2.1/2.1 per cent. plus an additional 1.0/0.8/0.8 per cent. of headroom; each authority will therefore receive a basic increase of 3.1/2.9/2.9 per cent. Funding for ministerial priorities is equivalent to an additional 1.5/0.8/1.4 per cent. per pupil on average, giving an average increase in DSG per pupil for each year of 4.6/3.7/4.3 per cent.
	Alongside the increases in DSG for all authorities we will increase direct funding to schools through the School Standards Grant (SSG) and School Standards Grant Personalisation (SSG (P)), in line with the level of the MFG. Each authority's allocation of School Development Grant will be increased in line with the MFG, and all schools are guaranteed the same cash allocation per pupil year on year: this will allow some updating of the distribution of this grant, while continuing to protect schools.
	The Learning and Skills Council plans to announce increases in the funding rates for school sixth forms as well as the details of its new funding methodology, to be used for school sixth forms and other 16-18 provision, including transitional measures to smooth the introduction of the new formula. Sixth form funding will therefore no longer be taken into account when local authorities apply the MFG to schools with sixth forms. We will announce in December allocations of the specific formula grant to support the introduction of diplomas from September 2008. That will augment the £110 million we allocated through DSG in 2007-08 to support practical learning options. That funding is now part of the DSG baseline going forward and we expect local authorities to utilise it to support the roll out of diplomas.
	This settlement builds on the foundations of the last ten years of rapid growth in school funding: every school and local authority will receive increases in funding per pupil each year; but every school will also face the challenge of making their funding work harder in support of our shared aims. On top of the basic increases there is significant additional funding to support our priorities: the personalisation of teaching and learning, support for all pupils to make good progress, the extension of the early years offer to parents, and extended children's services provided from schools. And a three year settlement supports schools as they take better informed, long term, strategic decisions.

DEFENCE

Defence Technology Plan

Bob Ainsworth: The Ministry of Defence has today announced the development of the Defence Technology Plan (DTP), a cost-balanced list of Research and Development (R&D) priorities for the MOD. The DTP will build upon the Defence Technology Strategy (DTS), published in October 2006, and will provide clear direction to the R&D community, allowing industry and academia better to direct its investment in defence technology. Population of the DTP will continue throughout 2008.
	The DTP will be a plan starting with capability driven research goals, showing how the goals will be met by R&D activity supporting later phases of acquisition.
	The DTP will set out the R&D programme by presenting a number of high level R&D objectives in the form of technology roadmaps. Each R&D objective will be described in similar terms to allow the R&D board to provide strategic direction and oversight of the entire programme.
	The DTP is being developed by R&D staff in consultation with the wider stakeholder community and will be owned by the Defence R&D Board. DTP will have a dynamic online format, allowing regular updates when necessary and will be available in three versions; a Government version available on internal networks, a defence industry version available to appropriately security cleared companies and a public version available on the internet.

HEALTH

Figures on Delayed Discharges

Ivan Lewis: In response to questions from the hon. Member for North Norfolk (Norman Lamb), the Department placed tables in the Library on 29 October containing the numbers of patients in hospitals whose discharge had been delayed, and the total and the total number of bed nights in each hospital trust lost as a result of such delays, Official Report, column 1030W.
	Following further investigation of the data collection and reporting systems used to compile that information I have to report that the information published contained significant errors that overstated the numbers in each category.
	Contrary to the impression given by the original inaccurate tables and subsequent media reports, the situation is that bed days lost because of delayed discharges have decreased by approximately 5 per cent. in the past year. The revised information is available in the Library.

Electronic Patient Record

Ben Bradshaw: The Government have today laid before Parliament their response to the Health Select Committee report on the electronic patient record and its use (Cm 7264).
	In the response, the Government welcome the Committee's findings on the potential of electronic patient records to improve health care services and patient safety. While significant progress has already been made, it is recognised that some parts of the National Programme for IT in the National Health Service have been subject to delay. The Government also recognise that continuing effort is needed to engage with front-line NHS staff and to communicate the programme plans to the public.
	The response is available in the Library.

LEADER OF THE HOUSE

Topical Debates

Harriet Harman: The House recently approved (25 October 2007) the introduction of topical debates, as recommended by the Select Committee on Modernisation in its report, "Revitalising the Chamber: the role of the back bench Member"(1). This will extend the opportunities in the Chamber to discuss topical issues of regional, national or international importance. Topical debates will last for 90 minutes and take place on a weekly basis.
	A Member seeking such a debate may do so in the following ways:
	In writing to the Leader of the House of Commons;
	Via the email link on the home page of the website of the Leader of the House of Commons at: www.commonsleader.gov.uk;
	By requesting a topical debate during the weekly Business Questions; and
	In person to the Leader of the House of Commons.
	Following discussions, the House will be notified of the subject selected, either during the announcement of business on Thursday or through the Order Paper, depending on the date chosen for the debate. The subject will appear on the annunciator alongside other business
	As agreed by the House, the motion for these debates will be "That this House has considered [the matter of XXX]" and will not be amendable. The debates will be subject to limits on speeches as agreed by the House.
	(1)HC337

WORK AND PENSIONS

Remploy

Anne McGuire: We have today received Remploy's final modernisation proposals. Good progress was made during the consultation period under the chairmanship of Roger Poole, and although the negotiations concluded with a formal failure to agree, we feel there has been real dialogue between the company and their trade unions and progress on both sides. We also expect to receive further representations from the trade unions representing the Remploy workers.
	The talks identified some important common ground, in particular:
	Agreement on the overall funding envelope of £555 million over five years.
	The need for both employment services and factory provision.
	Fewer factory closures.
	The importance of gaining more public sector contracts.
	The importance of local initiatives in securing the future of Remploy factories by winning more public and private contracts, led by factory managers, trade unions, constituency MPs and other local stakeholders.
	The need to reduce management and other overhead costs.
	The need to improve working practices, saving £10 million over five years.
	The need to dramatically improve industrial relations.
	Ministers have committed that Remploy's revised proposals will receive full ministerial scrutiny before any final decision. We will therefore study them in detail before making a further statement to the House in due course.